GBP/USD rose to 1.3506 on Tuesday. The British pound moved comfortably away from last week’s one-month high of 1.3480. Pressure on the currency had previously increased after the collapse of US-Iranian talks over the weekend.
The collapse of the dialogue came after Tehran refused to abandon its nuclear program and disagreements over the terms of the agreement, which the Iranian side described as excessive. Against this background, Donald Trump threatened to close the Strait of Hormuz, a vital oil supply route. This pushed Brent crude prices to $102.00 per barrel.
Oil has become significantly more expensive, exacerbating an already tense global energy situation and increasing the risk of an inflationary shock. As a result, market expectations shifted towards a tougher policy from the Bank of England.
As a result, investors are now pricing in at least one rate hike by the end of 2026.
Technical analysis
On the H4 GBP/USD chart, the market is forming a broad consolidation range around 1.3333, currently extending to 1.3535. A decline to 1.3333 is expected in the near term. After this correction is completed, a new consolidation band will likely form. An upward breakout will open up the possibility of a continuation of the wave to 1.3411, while a downward breakout will indicate further movement to 1.3120. Technically, this scenario is confirmed by the MACD indicator, whose signal line is above the zero level and is strongly pointing down.
On the H1 chart, the market formed a consolidation range around 1.3455 level, and with a bullish breakout, completed the wave structure to 1.3535. It is now expected to start declining towards 1.3388. Technically, this scenario is confirmed by the Stochastic indicator, whose signal line is above the 80 level and points strongly down towards the 20 level.
conclusion
The GBP/USD pair found support as markets appear to have largely factored in the recent geopolitical escalation following the failure of talks between the US and Iran. Trump’s threat to close the Strait of Hormuz has sent oil prices above US$102.00 per barrel, intensifying inflationary concerns and shifting expectations towards a tightening Bank of England policy, with at least one interest rate hike in 2026. While the pound has shown resilience, the broader outlook remains clouded by risks related to the energy market. Technical indicators point to a possible near-term pullback, but the pair’s direction will ultimately depend on whether geopolitical tensions continue to escalate or show signs of easing.
